What Will You Do With the Cash Mr. Softy (MSFT)?

Microsoft's (Nasdaq: MSFT) first ever bond offering, which is expected to total $3.75 billion, has traders gums flapping about what they will do with the cash.

Mr. Softy already has a cash hoard of more than $25 billion, and throws off more cash each quarter, so they definitely don't need the money. So what will they do with it?

In its preliminary prospectus, Microsoft said the net proceeds from the sale of the notes will be used for corporate purposes, which may include funding for working capital, capital expenditures, repurchase of their capital stock or acquisitions.

Traders are focusing on the 'acquisitions' part of the disclosure, and the two companies that are being talked about the most: Yahoo! (Nasdaq: YHOO) and SAP (NYSE: SAP).

Microsoft is supposedly in talks with Yahoo! already on a search-only deal, but with signs of an economic recovery sprouting up, could Microsoft make a run for the entire company again? Shares of Yahoo! are up 2% today.

Business software company SAP (NYSE: SAP) is also thought to be a good fit for Microsoft. Today, SAP co-CEO issued a 'no comment' on the speculation. Shares of SAP are up 1.8% today.

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